The BJP called the Delhi High Court ruling a "major setback" for the Congress. At the heart of the case is the publisher of the National Herald, an English daily founded by Jawaharlal Nehru.

Sonia Gandhi and son Rahul Gandhi will face an income tax probe in the National Herald case

New Delhi:

Highlights

Delhi High Court orders income tax investigation for Gandhis' firm

It is accused of illicitly acquiring real estate assets for Gandhis

Property originally owned by newspaper publishing company

The Delhi High Court today refused to stop an income tax investigation into Young Indian, a company which has Congress bosses Sonia and Rahul Gandhi as its main stakeholders, asking it to first approach tax authorities.

"We are not inclined to entertain your writ petition. It is better you withdraw it and approach the income tax assessing officer," the court told the firm, which had challenged a lower court order. Young Indian then withdrew its case.

While Sambit Patra of the ruling BJP described it as a "major setback" for the Congress, the opposition party claimed it was not a setback. "We will now go back to the assessing officer and can raise objections, including challenge re-opening income tax investigations, as the IT department doesn't have enough evidence to probe Young Indian," said senior lawyer and Congress leader Abhishek Manu Singhvi.

At the heart of the court case is Associated Journals Limited, publisher of three newspapers, including the National Herald, an English daily founded and edited by Jawaharlal Nehru before he became India's first prime minister.

In 2008, the company shut down with an alleged unpaid debt of about 90 crore rupees.

BJP leader Subramanian Swamy has accused Rahul Gandhi, PM Nehru's great-grandson, and Sonia, of setting up Young Indian Company to buy the debt using Congress party funds even though Associated Journals allegedly had real estate assets worth at least 2,000 crores, which would have cleared the debt.

Mr Swamy alleged that the Young Indian Company then owned all of the equity in Associated Journals and rented out its properties to profit its shareholders, including Rahul and Sonia Gandhi, who together controlled 76 per cent.

The Gandhis in January 2016 won an appeal to be exempted from personal appearances in court to answer allegations that they used their leadership of the Congress to misuse party funds for personal profit.